Apple Faces Second Class Action Lawsuit Threat Over Failing to Warn Investors About Slowing iPhone Demand

[Baymowe335]

It's the stock-exchange, the unregulated casino - what did people expect?

I hope you’re independently wealthy because if you’re not, the stock market is the only game in town and the only way for average people to retire wealthy.

Stocks have practically zero risk over time. If you invest consistently and don’t do stupid things like sell when stocks go down, you WILL do well. Period, proven empirically.

The US market is the biggest wealth creator the world has ever seen.

When stocks go down, particularly high quality stocks like AAPL, they get LESS risky, not more risky.
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I think Apple was having problems for a couple years now. The first way they tried to address it was inflate the price of newer phones to offset the lower quantity being purchased. This got them by last year and Apple got too comfortable and did the same with iPads and such. Consumers recognized that the prices are a little out of control at this point and have refrained from buying their products. If Apple doesn't change course quickly, this problem will compound year over year.

Evidently, you didn’t read the numbers or you simply don’t understand what’s going on. This isn’t widespread throughout Apple or widespread in all their markets.

Meanwhile, iPad posted double digit y/y growth. MacBooks set a record, services hit a record, wearables (Watch, AirPods) grew 50%, and the non iPhone businesss in general grew 19% y/y. The non iPhone businesses are doing incredibly well and the iPhone outside of China did well overall.

Over 100% of the revenue shortfall was due to iPhone in China.

This revenue guidance was revised almost entirely because of a slowdown in China.

The user base has never been larger, with Apple ADDING another 100M active users in the last 12 months.

The last 3 years, they have actually sold more iPhones each year, by about 1M per year, so they weren’t selling “lower quantities.”

They need to figure out China and some of the emerging markets, but Apple will still hit record revenues, in the US, Canada, Korea, and many countries in Europe.

They will still post record EPS.

 

[gnasher729]

As much as investment drives an economy, and is generally positive (I think, anyway), it does have the downside of making investors customers and customers commodities to please them.

Buying shares is only an investment when companies issue new shares to get money. If you buy Apple shares, Apple doesn't get a penny from that purchase that could be invested in R&D, more stores etc.
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Looking at the bigger picture, I hope Apple re-think their strategy. Pricing is becoming ridiculous and is heading towards alienating their loyal customers. Also putting off potential new ones.

In the latest product round, every single phone had its price reduced, except the iPhone X which was replaced with a better phone at the same price, and two newer phones. Do you think that is ridiculous?
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You're right, I put in the wrong stats for the context. But Tim Cook's letter mentions lower than expected iPhone sales in developed markets too. Even blamed the battery replacements.

The battery replacements may have kept some people from buying new phones (got a battery replacement for a four year old phone about Dec 15th, thank you very much), but will have massive long term value for the company. If you just gave your iPhone a new life with a new battery, what will be the next phone that you buy? And if you used your previous iPhone for five years, then an iPhone XS-Max doesn't look that expensive anymore.

I think many people look only at sales numbers and are complaining that Apple sells more expensive models to make up for shrinking sales. But the real number is the number of iPhones in active use, and that is growing. And with iPhones lasting longer, more expensive models become more affordable.
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oh so you are saying its ok for Apple to play with other peoples money without being transparent?

The stock market has actually very little to do with Apple. You can't buy shares from Apple, you buy them from an existing shareholder who is not Apple, and you pay that shareholder.
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If you dislike Tim's work so much, you're welcome to buy another brand. Also, regarding your rant about the Mac Pro, Apple said long ago that the new version is coming in 2019. Everyone here knows that. It's been 2019 for FOUR DAYS. Give it a rest, Veruca.

Given that you can buy an 18 core iMac, I don't see that much requirement for a Mac Pro anymore. And only for really expensive Mac Pros.

 

[DeepIn2U]

I liked apple as the underdog. I don't like this new big apple.

This suit is not going away quickly. There seems to be some worthy merit to it and I can see Apple and Cool getting a bit of a 4knuckle hot hands smack over it.

 

[MRrainer]

I hope you’re independently wealthy because if you’re not, the stock market is the only game in town and the only way for average people to retire wealthy.

I believe, for my generation there will be no real retirement anymore. We'll have to work until the end.
Our governments have spent all our savings already and maybe also those of our kids.
Mostly to "save" banks (and investors), who mainly used the money to prop-up stocks and finance huge acquisitions and expansions.

I grew up in a time when a savings-account paid 8% interest.

 

[I7guy]

This suit is not going away quickly. There seems to be some worthy merit to it and I can see Apple and Cool getting a bit of a 4knuckle hot hands smack over it.

Either the suit goes away fast or it will linger for 5 to 7 years or so.

 

[bcbickers]

What basis is there for a lawsuit? Apple projected future sales targets based upon historical sales metrics, and they were wrong. Shame on them for being so arrogant about their products, shame on them for not being a little more conservative, shame on them for not understanding the Chinese market. But ILLEGAL??! Come on, investors. No investment is a sure thing, especially publicly traded US stocks.

[rant] I really don't get this "new America" that is comprised of butterflies who can't handle any kind of strife, difficulty, or even just unpleasant news. Life is not all rainbows and roses. Even if it were, rainbows come AFTER the rainfall, and roses have thorns. Is this the result of us listening to the ramblings of Dr. Spock? "I didn't make any money on Apple stock. They MUST have cheated. Sue, sue, SUE..." Jeez..... [/rant]

 

[ipponrg]

I believe, for my generation there will be no real retirement anymore. We'll have to work until the end.
Our governments have spent all our savings already and maybe also those of our kids.
Mostly to "save" banks (and investors), who mainly used the money to prop-up stocks and finance huge acquisitions and expansions.

I grew up in a time when a savings-account paid 8% interest.

Investing in individual stocks is still a risk. You could invest in a company that has historically done well but just does not bounce back in the market due to a lack of growth. Apple could be an excellent buy today and go up, or it can just stay where it is. No one really knows.

Right now to get more consistent earnings, I think high yield savings are the way to go. They were 4% in the early 2000s, and it’s getting there again.

My current “retirement” strategy is to max out matching for 401k, invest a percentage into large cap interest earning ETFs/stocks, and put another percentage into high yield savings. I still have left over money for other things, but I also feel I won’t be able to retire in my lifetime either.

 

[Baymowe335]

I believe, for my generation there will be no real retirement anymore. We'll have to work until the end.
Our governments have spent all our savings already and maybe also those of our kids.
Mostly to "save" banks (and investors), who mainly used the money to prop-up stocks and finance huge acquisitions and expansions.

I grew up in a time when a savings-account paid 8% interest.

Do you understand why the savings account was paying 8% interest and why that doesn't last forever? The stock market is the best investment vehicle in the world. Nothing has done better.
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Investing in individual stocks is still a risk. You could invest in a company that has historically done well but just does not bounce back in the market due to a lack of growth. Apple could be an excellent buy today and go up, or it can just stay where it is. No one really knows.

Right now to get more consistent earnings, I think high yield savings are the way to go. They were 4% in the early 2000s, and it’s getting there again.

My current “retirement” strategy is to max out matching for 401k, invest a percentage into large cap interest earning ETFs/stocks, and put another percentage into high yield savings. I still have left over money for other things, but I also feel I won’t be able to retire in my lifetime either.

Individual stocks carry risk, but high quality names like Apple have consistently outperformed the S&P500 over the long term.

Avoiding stocks and trying to invest with "high yield savings" accounts is terrible advice.

Current savings account pay 2.5% at best and those kinds of returns are a joke over the long term. You need stocks to get the best returns.

 

[MRrainer]

Do you understand why the savings account was paying 8% interest and why that doesn't last forever? The stock market is the best investment vehicle in the world. Nothing has done better.
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Individual stocks carry risk, but high quality names like Apple have consistently outperformed the S&P500 over the long term.

Avoiding stocks and trying to invest with "high yield savings" accounts is terrible advice.

Current savings account pay 2.5% at best and those kinds of returns are a joke over the long term. You need stocks to get the best returns.

Currently, my savings-account pays more or less zero (close enough to zero that the return is negligible).
2.5% would be OK for me.
Our central-bank even has negative interest rates (-0.75% IIRC) for large enough balances (not my problem, obviously).

The problem I have with the stock market is that due to low central-bank interest rates, it has become the only form of investment - and thus valuations have ballooned out of proportion (IMO).
Companies started to use excess-money to buy their own stocks, exacerbating the problem.
This is also why I think it was a silly idea of Apple to buy AAPL with their cash. There's a reason Steve Jobs hoarded cash like Scrooge McDuck: he didn't trust the stock-exchange either. As a result, AAPL did not lose money in the 2008 crash.

I simply do not believe that if I buy now, I will ever get my money back. Or I might have to wait long until retirement-age before it's not negative anymore. Similar to people who invested prior to 2000 and 2008.

Of course, chances are that whatever cash I have might at least in parts get confiscated at the next bank bail-in, which will inevitably come.

But I trust the state to find a way to screw everybody more or less equally ;-)

Lastly, I don't really consider hoarding cash as good advice, I didn't mean it as such.

 

[Baymowe335]

Currently, my savings-account pays more or less zero (close enough to zero that the return is negligible).
2.5% would be OK for me.
Our central-bank even has negative interest rates (-0.75% IIRC) for large enough balances (not my problem, obviously).

The problem I have with the stock market is that due to low central-bank interest rates, it has become the only form of investment - and thus valuations have ballooned out of proportion (IMO).
Companies started to use excess-money to buy their own stocks, exacerbating the problem.
This is also why I think it was a silly idea of Apple to buy AAPL with their cash. There's a reason Steve Jobs hoarded cash like Scrooge McDuck: he didn't trust the stock-exchange either. As a result, AAPL did not lose money in the 2008 crash.

I simply do not believe that if I buy now, I will ever get my money back. Or I might have to wait long until retirement-age before it's not negative anymore. Similar to people who invested prior to 2000 and 2008.

Of course, chances are that whatever cash I have might at least in parts get confiscated at the next bank bail-in, which will inevitably come.

But I trust the state to find a way to screw everybody more or less equally ;-)

Lastly, I don't really consider hoarding cash as good advice, I didn't mean it as such.

AAPL stock went down with the rest of the market in 2008 and rebounded like all good companies. Companies don't necessarily lose cash when their stock prices fall. They really are independent events. For example, AAPL has moved from $230 to $150 and have gained in their cash position.

AAPL currently has so much cash (over $130B in net cash and $240B in total cash), they basically have no choice but to buyback their shares. Apple still hoards cash and their buyback and dividend are still (unbelievably) relatively small.

2.5% is a joke of a return, FYI.

If you invested prior to 2008, even at the top...you will have still done very well. The Dow was ~13,500 prior to 2008 and is now 23,500 plus you'd had the dividends along the way.

Valuations aren't even close to out of control. That is measurable. The S&P500 is trading at about 20X earnings...completely reasonable given the currently state of the economy, tax law, and earnings growth we're seeing.

 

[MRrainer]

I know. Thanks for your comments.
I'm only good at hindsight-investing ;-)

 

[Baymowe335]

I know. Thanks for your comments.
I'm only good at hindsight-investing ;-)

You have a beautiful country, just fyi.

 

[ipponrg]

Do you understand why the savings account was paying 8% interest and why that doesn't last forever? The stock market is the best investment vehicle in the world. Nothing has done better.
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Individual stocks carry risk, but high quality names like Apple have consistently outperformed the S&P500 over the long term.

Avoiding stocks and trying to invest with "high yield savings" accounts is terrible advice.

Current savings account pay 2.5% at best and those kinds of returns are a joke over the long term. You need stocks to get the best returns.

It depends, and keyword is long term. Don’t make blanket statements thinking all investors are thinking long term like you. It’s why many stress diversification.

Getting 2.5% is better than nothing. Depending on your life situation and stability, if you can’t weather volatility, you don’t want to put all your money into a stock like Apple. If people bought when you said to buy Apple, they’d be down at least 20 percent at least.

 

[Baymowe335]

It depends, and keyword is long term. Don’t make blanket statements thinking all investors are thinking long term like you. It’s why many stress diversification.

Getting 2.5% is better than nothing. Depending on your life situation and stability, if you can’t weather volatility, you don’t want to put all your money into a stock like Apple. If people bought when you said to buy Apple, they’d be down at least 20 percent at least.

I never said to trade it. Buying at $175 will be a long term investment. And I always advocate buying more when a stock goes down. If you like it at $170, you should like it more at $150. Stocks going down is good news for long term investors.

You shouldn’t buy stocks with money you’ll need in the next 5 years, true, but if you can’t avoid stocks. It isn’t smart.

 

[k0bayashi]

Just not a good time for Apple right now!!

Yeah they're not having a good time.

 

[ipponrg]

I never said to trade it. Buying at $175 will be a long term investment. And I always advocate buying more when a stock goes down. If you like it at $170, you should like it more at $150. Stocks going down is good news for long term investors.

You shouldn’t buy stocks with money you’ll need in the next 5 years, true, but if you can’t avoid stocks. It isn’t smart.

Buying at 175 is just paper money. You’re hoping it goes back up to that value and more.

Most people who are not actively monitoring the stock market are better off investing in ETFs, outside their 401ks. I would never blindly tell someone to “invest all your money in 1 company because it will be up in 10 years”. That is not smart.

 

[Baymowe335]

Buying at 175 is just paper money. You’re hoping it goes back up to that value and more.

Most people who are not actively monitoring the stock market are better off investing in ETFs, outside their 401ks. I would never blindly tell someone to “invest all your money in 1 company because it will be up in 10 years”. That is not smart.

This isn't hope. I'm buying a piece of a business that returns cash until judgment day.

You should read more about investing. No one ever said to invest "all your money" in 1 stock.

 

[DeepIn2U]

AAPL stock went down with the rest of the market in 2008 and rebounded like all good companies. Companies don't necessarily lose cash when their stock prices fall. They really are independent events. For example, AAPL has moved from $230 to $150 and have gained in their cash position.

AAPL currently has so much cash (over $130B in net cash and $240B in total cash), they basically have no choice but to buyback their shares. Apple still hoards cash and their buyback and dividend are still (unbelievably) relatively small.

2.5% is a joke of a return, FYI.

If you invested prior to 2008, even at the top...you will have still done very well. The Dow was ~13,500 prior to 2008 and is now 23,500 plus you'd had the dividends along the way.

Valuations aren't even close to out of control. That is measurable. The S&P500 is trading at about 20X earnings...completely reasonable given the currently state of the economy, tax law, and earnings growth we're seeing.

Please teach us more; preach!!

Yeah they're not having a good time.

Investors are surely having a great time!!

 

[a.gomez]

The real problem is they are charging too much for their products. This causes folks to hold out until it is absolutely necessary to upgrade or look at alternatives. Apple needs to adapt by accepting lower profit margins and probably make a Smart TV bundled around services.

Yep... 100%. They cant just keep raising prices to make up growth.

 

[ipponrg]

This isn't hope. I'm buying a piece of a business that returns cash until judgment day.

You should read more about investing. No one ever said to invest "all your money" in 1 stock.

If you actually read what I posted previously, you would've seen my investment strategy already.

This isn't hope. I'm buying a piece of a business that returns cash until judgment day.

Until if/when they stop dividends and their stock price goes below what you purchased at. The hope is that it continues to go up. But let's say you reinvest your dividends into the same falling stock, and it stays there or barely grows. What is going to be your net?

There are many different strategies in investment (flipping real estate, bonds, ETFs/mutual funds/401ks, high yield savings, etc). Each have their own risks involved, and you should be more transparent about that.

And yes I am up by a lot, but I would never naively tell someone to just invest in stocks, and it's a guaranteed win.

 

[Baymowe335]

If you actually read what I posted previously, you would've seen my investment strategy already.



Until if/when they stop dividends and their stock price goes below what you purchased at. The hope is that it continues to go up. But let's say you reinvest your dividends into the same falling stock, and it stays there or barely grows. What is going to be your net?

There are many different strategies in investment (flipping real estate, bonds, ETFs/mutual funds/401ks, high yield savings, etc). Each have their own risks involved, and you should be more transparent about that.

And yes I am up by a lot, but I would never naively tell someone to just invest in stocks, and it's a guaranteed win.

It's not naive. It's fact. Stocks outperform all asset classes over time, period. Individual stocks can be a risk, sure.